Always at the Table

On one of my last trips to Washington, D.C., as your president, I joined other business leaders before the Senate Banking Committee to talk about the consequences of a first-ever U.S. government default on its debts.

There are thousands of interest groups and associations in Washington but only four chairs were at the witness table that morning. I was there for the same reason I had been asked to join President Obama at the White House just a few weeks earlier for a speech he gave on the five-year anniversary of the financial crisis: When it comes to giving our government in Washington an objective view of what their policies mean on the street, no association is sought more than ours. It’s because of our place at the table that, despite the heated rhetoric that passes for public debate in our government today, reason has a chance to prevail at the public-policy level.

I’ve written in previous columns about our victories on the qualified mortgage and qualified residential mortgage rules. The initial versions of those rules would have been devastating to households’ ability to secure safe and affordable mortgage financing. The same thing happened with regulators’ first cut at rules to implement the Basel III capital standards. Banks would have had to pay what amounts to a surcharge for each home loan they make if we hadn’t stepped in with a dose of reality.

In one of my last trips to Washington, I sat down with the head of the Federal Housing Finance Agency to talk about my concerns over a proposal to reduce the loan amount the two secondary mortgage companies, Fannie Mae and Freddie Mac, can finance. The FHFA believes scaling back the size of conventional, “conforming” loans across the board will create space for lenders to enter the market with non-government-backed mortgage products. That’s a goal NAR shares with the FHFA, but my message to the head of the agency was to wait. Until Congress determines how to reform the secondary mortgage market, shrinking the universe of government-backed loans will only make it harder for households to get financing at a time when the housing market is still recovering.

The fact is, regulators are great at devising rules that meet their policy objectives, but it falls to organizations like ours to show how they’ll work—or not work—on the ground. And that’s what our association does so well.

That’s why, when there are only a handful of seats available, NAR will be at the table, whether it’s in a hearing room with lawmakers or in a meeting room with regulators.

We were handed a challenging set of issues this year, many of them still in flux, but our victories show that, as the voice for real estate, we remain the go-to association when it comes to providing an objective, productive viewpoint in Washington.